Page 4 - EurOil Week 46 2021

EurOil COMMENTARY EurOil

Details disclosed of Cheniere’s LNG

supply deal with France’s Engie

US LNG producer Cheniere Energy is reported to have struck a deal to supply

the fuel to France’s Engie earlier this year

FRANCE LEADING US LNG producer Cheniere Energy Cheniere as evidence of its commercial momen-
struck a deal to supply the super-chilled fuel to tum as the company tries to contract more of
WHAT: France’s Engie earlier this year, according to a its LNG capacity ahead of the FID on Corpus
Cheniere is reported letter to the US Department of Energy (DoE) Christi Stage 3.
to have reached a deal whose details have now been made public. The deals illustrate how appetite to strike
earlier this year to sell Under the newly disclosed deal, which was new long-term offtake deals is growing against a
LNG to Engie. reached on June 23 according to the letter to the backdrop of energy shortages. On the one hand,
DoE, Cheniere will supply 0.4-1.2mn tonnes buyers are cautious not to overcommit in case
WHY: per year (tpy) of LNG to Engie over an 11-year demand drops off again, and the annual volumes
The deal comes after period starting this year. The volumes will come involved in Cheniere’s deals – and a number of
Engie reportedly from Cheniere’s Corpus Christi LNG terminal those struck by other LNG companies recently –
abandoned talks with in Texas, where Cheniere is planning to add new are comparatively small. On the other, these buy-
NextDecade last year liquefaction capacity through its Stage 3 expan- ers are keen to avoid being left overly exposed
amid pressure to oppose sion, with a final investment decision (FID) to the spot market, which has been particularly
the use of shale gas as scheduled for next year. volatile over the past year.
feedstock for LNG. Cheniere did not disclose the deal at the time
that it was reached, and has not commented on Changing priorities
WHAT NEXT: the matter since it became public. However, the The Cheniere-Engie deal is also notable because
Cheniere is moving closer deal was followed by a number of others, which last year the French company pulled out of talks
to sanctioning additional were publicly disclosed by the LNG producer. over a potential supply deal with a different US
liquefaction capacity, In recent weeks, Cheniere has reached supply LNG player, NextDecade, which is proposing to
while NextDecade is being agreements with commodity trader Glencore build a new liquefaction terminal in South Texas.
held up by legal and and Chinese firms ENN Natural Gas and Sino- Engie was reported to have come under pressure
regulatory challenges. chem. All of those deals have been portrayed by from the French government not to buy LNG

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